Yes, Mr. Chair. Thank you.
While I provided an introductory comment at my previous experience on Tuesday, May 10, I thought a quick recap of part 4, division 5, of Bill C-15 would be helpful.
The proposed amendments in part 4, division 5, provide a legislative framework for a bank recapitalization, or a bail-in regime. Bail-in is the power to convert certain long-term debt of a failing bank into common shares to absorb losses, recapitalize the bank, and allow it to keep operating.
As we clarified in our last discussion, all deposits are excluded. Amendments to the Canada Deposit Insurance Corporation Act would provide CDIC with the power to undertake a bail-in conversion. Implementation of the proposed bail-in regime would give authorities an additional tool to deal with the unlikely failure of a major bank in a manner that protects financial stability as well as taxpayers.
These reforms would strengthen our tool kit for managing bank failures, so that it remains consistent with international best practices and standards endorsed by the G-20 following the financial crisis. We would be pleased to address any additional questions the committee may have.